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AMLA 101 – Can a Person Use Proceeds from Unlawful Activities to Pay for Their Legal Fees?

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The answer is no, as seen in the Court of Appeal case of Deputy Public Prosecutor v Amar Asyraf bin Zolkepli (Public Islamic Bank Bhd, third party) (Messrs Wan Shahrizal, Hari & Co, intervener). We will briefly look at the case below.

Brief fact of the case

Amar was arrested and charged under the Computer Crimes Act and Penal Code for hacking into the Immigration Department software system and provided the software system to a syndicate to do the same (Amar was paid RM1,000.00 by the syndicate every time the use of the software resulted in what the syndicate wanted).

Can a Person Use Proceeds from Unlawful Activities to Pay for Their Legal Fees?

Once the investigation was concluded, the public prosecutor applied for a seizing order (and subsequently a forfeiture order) against Amar’s properties under AMLA. Once that was done, a third party notice (under section 61 of AMLA) was published  to allow any party who has an interest in the properties to attend court and to give reasons as to why the properties shall not be forfeited. 

Two parties came forward to stake their claims, namely:

  1. Public Islamic Bank Bhd, as a third party; and
  2. Messrs Wan Shahrizal, as an intervener (a party who is not named in the suit but has a personal stake in the outcome of the case), is claiming legal fees for representing Amar in the current case.

The High Court allowed both claims. Unsatisfied with the decision (where the court allowed the claim by Messrs Wan Shahrizal), the public prosecutor appealed the matter to the Court of Appeal.

The parties’ contention

The public prosecutor contended (amongst others) that the legal fees cannot be paid from Amar’s seized properties as they were the proceeds of unlawful activity. If such a claim were to be allowed, it would potentially open up floodgates of claims- everyone would come and claim that they have a legitimate interest in the seized properties.

Messrs Wan Shahrizal’s lawyer claimed otherwise. They claimed that as a person has the right to be represented (enshrined by Article 5(3) of the Federal Constitution), this automatically means/ imposes the responsibility on the person who is represented by a lawyer to pay his legal fees as well. Otherwise, no one would want to represent such a person.

The court’s decision and rationale

The Court of Appeal sided with the public prosecutor. In coming to its decision, the court noted that the purpose of AMLA is to prevent money laundering and forfeiture of proceeds from any unlawful activity as specified under the Act. This includes preventing any person or body from obtaining any benefit from the proceeds of the unlawful activity.

Furthermore, the court noted that the fact that payment of legal fees cannot be made from the seized property, as it was the proceeds of unlawful activity, should not be considered as hindering the rights to counsel.

The court’s solution

So does this mean that Messrs Wan Shahrizal cannot claim for any legal fees at all? Not quite, as the court pointed out:

  1. Messrs Wan Shahrizal can take legal action against the respondent for the unpaid legal fees personally, provided that there is a contract entered between them (Messrs Wan Shahrizal to represent Amar and Amar pays Messrs Wan Shahrizal for the representation). However, in order to do so, the court noted that:
    1. No proprietary interest can be attached to the seized properties which are the proceeds of an unlawful activity as this is a personal action against Amar; and 
    2. This is applicable only if a judgment has been obtained against Amar for the payment of the legal fees, which is none in the current case.
  2. Amar can still pay Messrs Wan Shahrizal’s legal fees from his properties which are not proceeds of unlawful activity. 

Consult with a lawyer if you have any dispute regarding shareholders agreement:

  1. [2020] 12 MLJ 287.
  2.  1997.

Read our previous articles here:

  1. Challenging An Act of Seizure By Way Of Judicial Review
  2. AMLA MALAYSIA: Instituting A Civil Action After Seizure-Is It Possible?
  3. AMLA Malaysia – Introduction to “Smurfing”
  4. The Ultimate Guide To Buying Property In Malaysia